Spencer and Benefits NetNews – April 25, 2014

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News

April 25, 2014

IRS Issues 2015 Inflation-Adjusted Amounts For HSAs

Many employers are beginning to scale back their medical plan designs in an effort to avoid the “Cadillac tax” required by the Patient Protection and Affordable Care Act (ACA) in 2018, according to the fifth annual
In Rev. Proc. 2014-30, the Internal Revenue Service has issued inflation adjusted amounts under Code Sec. 223 for health savings accounts (HSAs) for 2015. For calendar year 2015, the annual limitation on deductions under Code Sec. 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan (HDHP) is $3,350. For calendar year 2015, the limitation on deductions under Code Sec. 223(b)(2)(B) for an individual with family coverage under a HDHP is $6,650…

Reference Pricing Could Cut Employer Health Care Costs: EBRI

A new approach called “reference pricing” in health insurance could cut employer health care costs, but the savings could depend on how health care providers and individuals react, according to recent research from the Employee Benefit Research Institute (EBRI). Under reference pricing, employers would pay a fixed amount or limit their contributions toward the cost of a specific health care service. Under this “defined contribution” pricing approach to health benefits, workers would pay any difference between the “reference” price for designated procedure(s), and the cost of the provider and/or procedure they chose…

April 24, 2014

Defined Contribution Benefits Model Is Attracting More Employers

Many employers are being prompted by upcoming implementation provisions of the Patient Protection and Affordable Care Act (ACA) to consider a transition from their current benefit models to a defined contribution (DC) model, according to recent research from Prudential. Under a DC benefits model, employees receive a lump sum amount for benefits from their employers. It is up to employees to decide how to allocate the funds between various types of benefits, such as health and dental insurance, life insurance, or accident insurance. The issue brief, entitledGroup Benefits and the Defined Contribution Model, is based on Prudential’sEighth Annual Study of Employee Benefits: Today & Beyond…

An ERISA plan could validly assert that an action by a plan participant was barred by the applicable state’s (California) statute of limitations because the plan had not waived its right to assert such a defense by later offering to review the file, the Ninth Circuit ruled inGordon v. Deloitte & Touche, LLP Group Long Term Disability Plan (No. 12-55114)…

April 23

Most Small Business Owners Have At Least Heard Of The ACA’s Small Business Tax Credit

The majority of small business owners are aware of the small employer health care tax credit created by the Patient Protection and Affordable Care Act (ACA), according to recent research from Mathematica Policy Research and the Robert Wood Johnson Foundation (RWJF). Small businesses are eligible to claim the ACA’s small employer health care tax credit if it makes nonelective contributions that pay for at least one-half of the cost of health insurance premiums for the coverage of its participating employees. In theSmall Business Health Insurance Survey, Mathematica and RWJF surveyed employers with three to 100 employees in five states (Alabama, Colorado, Minnesota, New York, and Oregon) to determine the early and likely future effects of the ACA on small businesses…

Employers Must Arbitrate “Sham” Mass Withdrawal Claim

Employers that had previously withdrawn from a multiemployer plan must arbitrate their contention that a subsequent mass withdrawal of all remaining employers from the plan was a sham designed to reap $12 million in reallocation liability payments from the previously withdrawn employers, the Sixth Circuit U.S. Court of Appeals has ruled inKnall Beverage, Inc., et al., v. Teamsers Local Union No. 293 Pension Plan, et al…

April 22, 2014

CRS Analyzes Economic Consequences Of ACA’s Small Employer Provisions

The Congressional Research Service (CRS) has published an analytical report of provisions of the Patient Protection and Affordable Care Act (ACA) that are relevant to small businesses. The report, TheAffordable Care Act and Small Business: Economic Issues, explains that health insurance and the health care market contain fundamental flaws leading to an inefficient allocation of resources, known as market failure, which, in turn, leads to a mismatch between supply and demand, perhaps necessitating government intervention…

Workers Desire Income Option For Retirement

Seventy-four percent of employers who offer a defined contribution plan in the United States believe their employees’ retirement readiness is an important measure on whether their current retirement benefits program is a success, according to recently-released research from LIMRA Secure Retirement Institute (LIMRA SRI)…

April 21, 2014

Enrollment In Employer-Sponsored Plans Increases By 8.2 Million Due To ACA

Between September 2013 and March 2014, enrollment in all health insurance plans increased by 9.3 million individuals, lowering the uninsured rate from 20.5 percent to 15.8 percent, according to recent research from the RAND Corporation. Most studies over this same time period are exclusively concerned with how many individuals have enrolled in health insurance marketplace plans. However, the RAND study, Changes in Health Insurance Enrollment Since 2013: Evidence from the RAND Health Reform Opinion Study, noted that goal of the Patient Protection and Affordable Care Act (ACA) is near universal coverage using all sectors of the health insurance market. Enrollment in employer-sponsored plans and Medicaid has increased due to the ACA: in March 2014, enrollment in employer-sponsored insurance (ESI) plans increased by 8.2 million and Medicaid enrollment increased by 5.9 million…

Just over 19 percent of the four most popular insurance plans (consumer-driven health plans (CDHP), preferred provider organizations (PPO), health maintenance organizations (HMO), and point-of-service plans (POS)) offer a wellness program, with CDHPs continuing to lead the trend with 26.9 percent offering such programs, according to recent research from United Benefit Advisors. The highest percentage of plans offering wellness programs came from employers with 1,000 or more employees (58.2 percent); however, middle market employers with 100 to 199 employees increased their wellness offerings by approximately 12.5 percent in 2013—double that of any other employer size subset. Surprisingly, employers with 1,000-plus employees decreased their wellness offerings by 0.7 percent…